As filed with the Securities and Exchange Commission on February 13, 1998
Registration No. 333-
--------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Agritope, Inc.
-----------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 93-0820945
- ----------------------------------- --------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
8505 S.W. Creekside Place
Beaverton, Oregon 97008
- ---------------------------------------- -------------------
(Address of principal executive officer) (Zip Code)
1997 Employee Stock Purchase Plan
-----------------------------------------
(Full title of the plan)
Adolph J. Ferro, Ph.D.
Chairman of the Board, President and
Chief Executive Officer
Agritope, Inc.
8505 S.W Creekside Place
Beaverton, Oregon 97008
(503) 641-6115
-------------------------------------------------------------
(Name, address and telephone number of agent for service)
Copies to:
Carol Dey Hibbs
Tonkon Torp LLP
1600 Pioneer Tower
888 S.W. Fifth Avenue
Portland, Oregon 97204
(503) 802-2016
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
===================== ======================= ====================== ======================= ========================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share(1) Price (1) Fee
- --------------------- ----------------------- ---------------------- ----------------------- ------------------------
Common
Stock, par
value $.01
per share, 250,000 $4.2234375 $1,055,859 $311.48
including shares
associated
preferred
stock
purchase
rights
===================== ======================= ====================== ======================= ========================
(1) Calculated pursuant to Rule 457(c) and 457(h)(1) for purposes of computing
the registration fee, based on 85 percent (the Maximum Purchase Price under the
1997 Employee Stock Purchase Plan) of $4.96875 (the average of the high and low
sales prices of the Common Stock on February 10, 1998, as reported by The Nasdaq
Stock Market).
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Agritope, Inc. (the "Company") with
the Securities and Exchange Commission (the "Commission") are incorporated by
reference in this registration statement:
(a) The description of the Company's Common Stock, par value $.01 per
share, including associated preferred stock purchase rights (the "Common
Stock"), set forth in the Company's Registration Statement on Form S-1, as
declared effective on December 24, 1997 (Registration No. 333-34597).
All documents filed by the Company subsequent to the document listed
above pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
Under the Delaware General Corporation Law ("DGCL"), the Company's
Certificate of Incorporation, as amended (the "Certificate"), and the Company's
Bylaws, the Company has broad powers to indemnify directors and officers against
liabilities that they may incur in such capacities.
Pursuant to Section 102(b)(7) of the DGCL, Article 8 of the
Certificate of the Company contains the following provision relating to the
personal liability of the Company's directors:
II-2
<PAGE>
The Board of Directors of the Corporation may provide, pursuant to
bylaws or other actions or agreements, that the Corporation shall indemnify
to the fullest extent permitted by the Delaware General Corporations Law,
as in effect at the time of the determination, any person who is made, or
threatened to be made, a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative,
investigative or otherwise (including any action, suit or proceeding by or
in the right of the Corporation), by reason of the fact that the person is
or was a director, officer, employee or agent of the Corporation, or any of
its subsidiaries, or a fiduciary within the meaning of the Employee
Retirement Income Security Act of 1974, as amended, with respect to any
employee benefit plan of the Corporation or any of its subsidiaries, or
serves or served at the request of the Corporation, or any of its
subsidiaries, as a director, officer, employee or agent, or as a fiduciary
of an employee benefit plan, of another corporation, partnership, joint
venture, trust or enterprise. The rights of indemnification provided in
this Article 8 shall be in addition to any rights to which any such person
may otherwise be entitled under any future amendment to this Certificate of
Incorporation or under any bylaw, agreements, statute, policy of insurance,
vote of stockholders or Board of Directors, or otherwise, which exists at
or subsequent to the time such person incurs or becomes subject to such
liability and expense.
Pursuant to DGCL Section 145 and Article 8 of the Certificate,
Article 8 of the Company's Bylaws provides:
Section 1. Directors and Officers.
-----------------------
(a) Indemnity in Third-Party Proceedings. To the fullest extent
---------------------------------------
permitted by law, the Corporation shall indemnify its directors and
officers in accordance with the provisions of this Section 1(a) if the
director or officer was or is a party to, or is threatened to be made a
party to, any proceeding (other than a proceeding by or in the right of the
Corporation to procure a judgment in its favor), against all expenses,
judgments, fines and amounts paid in settlement, actually and reasonably
incurred by the director or officer in connection with such proceeding if
the director or officer acted in good faith and in a manner the director or
officer reasonably believed was in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding,
the director or officer, in addition, had no reasonable cause to believe
that the director's or officer's conduct was unlawful; provided, however,
-------- -------
II-3
<PAGE>
that the director or officer shall not be entitled to indemnification under
this Section 1(a): (i) in connection with any proceeding charging improper
personal benefit to the director or officer in which the director or
officer is adjudged liable on the basis that personal benefit was
improperly received by the director or officer unless and only to the
extent that the court conducting such proceeding or any other court of
competent jurisdiction determines upon application that, despite the
adjudication of liability, the director or officer is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances of
the case, or (ii) in connection with any proceeding (or part thereof)
initiated by such person or any proceeding by such person against the
Corporation or its directors, officers, employees or other agents unless
(A) the Corporation is expressly required by law to make the
indemnification, (B) the proceeding was authorized by the Board of
directors or (C) such indemnification is provided by the Corporation, in
its sole discretion, pursuant to the powers vested in the Corporation under
the General Corporation Law.
(b) Indemnity in Proceedings by or in the Right of the Corporation.
----------------------------------------------------------------
To the fullest extent permitted by law, the Corporation shall indemnify its
directors and officers in accordance with the provisions of this Section
1(b) if the director or officer was or is a party to, or is threatened to
be made a party to, any proceeding by or in the right of the Corporation to
procure a judgment in its favor, against all expenses actually and
reasonably incurred by the director or officer in connection with the
defense or settlement of such proceeding if the director or officer acted
in good faith and in a manner the director or officer reasonably believed
was in or not opposed to the best interests of the Corporation; provided,
--------
however, that the director or officer shall not be entitled to
-------
indemnification under this Section 1(b): (i) in connection with any
proceeding in which the director or officer has been adjudged liable to the
Corporation unless and only to the extent that the court conducting such
proceeding or any other court of competent jurisdiction determines upon
application that, despite the adjudication of liability, the director or
officer is fairly and reasonably entitled to indemnification for such
expenses in view of all the relevant circumstances of the case, or (ii) in
connection with any proceeding (or part thereof) initiated by such person
or any proceeding by such person against the Corporation or its directors,
officers, employees or other agents unless (A) the Corporation is expressly
required by law to make the indemnification, (B) the proceeding was
II-4
<PAGE>
authorized by the Board of directors or (C) such indemnification is
provided by the Corporation, in its sole discretion, pursuant to the powers
vested in the Corporation under the General Corporation Law.
In addition to the indemnification and exculpation provided by the
Company's Certificate and Bylaws, the Company has entered into an
indemnification agreement with each of its directors and officers. The
indemnification agreements provide that no director or officer shall have a
monetary liability of any kind in respect of the director's or officer's errors
or omissions in serving the Company or any of its subsidiaries, stockholders or
related enterprises, so long as such errors are not shown by clear and
convincing evidence to have involved: (i) any breach of the duty of loyalty to
the such entities; (ii) any act or omission not in good faith or which involved
intentional misconduct or a knowing violation of the law; (iii) any transaction
from which the director or officer derived an improper personal benefit; (iv)
any unlawful corporate distribution as defined in the DGCL; or (v) profits made
from the purchase and sale by the director or officer of securities of the
Company within the meaning of Section 16(b) of the Securities Exchange Act of
1934, as amended. Furthermore, regardless of the theory of liability asserted
and to the fullest extent permitted by law, no director or officer shall have
personal liability for (i) punitive, exemplary or consequential damages; (ii)
treble or other damages computed based upon any multiple of damages actually and
directly proved to have been sustained; (iii) fees of attorneys, accountants,
expert witnesses or professional consultants; or (iv) civil fines or penalties
of any kind or nature whatsoever.
The indemnification agreements also require the Company to indemnify
any director or officer who is a party to, or is threatened to be made a party
to, any proceeding, against all expenses, judgments, fines and amounts paid in
settlement, actually and reasonably incurred by the director or officer in
connection with such proceeding, if the director or officer: (i) acted in good
faith and in a manner the director or officer reasonably believed was in or not
opposed to the best interests of the Company; and (ii) with respect to any
criminal proceeding, the director or officer also had no reasonable cause to
believe that his or her conduct was unlawful. In any proceeding charging a
director or officer with improper personal benefit to the director or officer,
the Company will indemnify the director or officer if the appropriate court
determines that the director or officer is fairly and reasonably entitled to
indemnification.
The indemnification agreements also provide indemnity to a director
or officer in proceedings brought by or in the right of the Company, as long as
the director or officer acted in good faith and in a manner which he or she
reasonably believed to be in, or not opposed to, the best interests of the
II-5
<PAGE>
Company. If a director or officer is adjudged liable to the Company, he or she
will not be indemnified, unless the appropriate court determines that the
director or officer is fairly and reasonably entitled to indemnification.
Notwithstanding the foregoing, the indemnification agreements
indemnify each director and officer to the fullest extent permitted by law with
respect to any proceeding against all expenses, judgments, fines and amounts
paid in settlement, actually and reasonably incurred by the director or officer
in connection with any proceeding. The forms of indemnification agreements
entered into between the Company and its officers and directors have been filed
with the Commission and are incorporated by reference to the Company's
Registration Statement on Form S-1, as declared effective on December 24, 1997
(Registration No. 33-34597).
The Company maintains directors' and officers' liability insurance
under which the Company's directors and officers are insured against claims for
errors, neglect, breach of duty and other matters.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The exhibits listed in the Index to Exhibits, which appears on page
II-10 herein, are filed as part of this registration statement.
Item 9. Undertakings.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
II-6
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the above-referenced provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
II-7
<PAGE>
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Beaverton, Oregon, on February 5, 1998.
AGRITOPE, INC.
By /s/ Adolph J. Ferro
---------------------
Adolph J. Ferro
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature
appears below hereby constitutes and appoints Adolph J. Ferro and Gilbert N.
Miller, and each of them, his or her true and lawful attorney-in-fact and agent,
with full power of substitution for him or her in any and all capacities, to
sign any and all amendments or post-effective amendments to this registration
statement, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto each such attorney and agent full power and authority to do any and all
acts and things necessary or advisable in connection with such matters, and
hereby ratifying and confirming all that each attorney and agent, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed by the following persons in
the capacities and on the date(s) indicated:
Principal Executive Officer: Date:
/s/ Adolph J. Ferro February 5, 1998
- ---------------------------------------
Adolph J. Ferro
Chairman of the Board President,
and Chief Executive Officer
II-9
<PAGE>
Principal Financial Officer:
/s/ Gilbert N. Miller February 5, 1998
- ------------------------------
Gilbert N. Miller
Executive Vice President,
Chief Financial Officer
and Secretary
Directors:
/s/ Adolph J. Ferro February 5, 1998
- --------------------------
Adolph J. Ferro
/s/ Gilbert N. Miller February 5, 1998
- --------------------------
Gilbert N. Miller
/s/ W. Charles Armstrong February 6, 1998
- --------------------------
W. Charles Armstrong
- -------------------------- ----------, 1998
Nancy L. Buc
- -------------------------- ----------, 1998
Michel de Beaumont
- -------------------------- ----------, 1998
Pierre Lefebvre
/s/ Roger L. Pringle February 4, 1998
- --------------------------
Roger L. Pringle
II-10
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Exhibit Page
- -------------- ------- ----
4.1 Certificate of Incorporation, as amended(1)
4.2 Bylaws(1)
4.3 Forms of Indemnification Agreements(1)
5.1 Opinion of Tonkon Torp LLP II-12
23.1 Consent of Price Waterhouse LLP, II-13
Independent Auditors
23.2 Consent of Tonkon Torp LLP II-12
(included in Exhibit 5.1)
24 Power of Attorney (See Page II-9) II-9
99 1997 Employee Stock Purchase Plan II-14
Other exhibits listed in Item 601 of Regulation S-K are not applicable.
(1) Incorporated by reference to the Company's Registration Statement on
Form S-1, as declared effective on December 24, 1997 (Registration No.
333-34597).
II-11
Exhibit 5.1
TONKON TORP LLP
Attorneys at Law
1600 Pioneer Tower
888 S.W. Fifth Avenue
Portland, Oregon 97204
(503) 221-1440
Fax: (503) 274-8779
February 10, 1998
To the Board of Directors
of Agritope, Inc.
Ladies and Gentlemen:
We have acted as counsel for Agritope, Inc. (the "Company") in
connection with the preparation and filing of a Registration Statement on Form
S-8 under the Securities Act of 1933 (the "Registration Statement"), covering
250,000 shares of the Company's Common Stock, par value $.01 per share,
including associated preferred stock purchase rights (the "Shares"), issuable
pursuant to the 1997 Employee Stock Purchase Plan (the "Plan"). We have reviewed
the corporate action of the Company in connection with this matter and have
examined and relied upon such documents, corporate records and other evidence as
we have deemed necessary for the purpose of this opinion.
Based on the foregoing, it is our opinion that the Shares have
been duly authorized and, when issued and sold pursuant to the Plan and
applicable subscription agreements, the Shares will be legally issued, fully
paid and nonassessable. We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
TONKON TORP LLP
II-12
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Agritope, Inc. of our report dated October 31, 1997,
except for Note 11, as to which the date is December 5, 1997, and our report
dated December 22, 1997, appearing on page F-1 and F-18, respectively, of the
Form S-1 of Agritope, Inc., as declared effective on December 24, 1997
(Registration No. 333-34597).
Price Waterhouse LLP
Portland, Oregon
February 13, 1998
II-13
AGRITOPE, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose of the Plan. This plan, effective December 30, 1997
-------------------
(the "Plan"), shall be known as the "Agritope, Inc. 1997 Employee Stock Purchase
Plan." The purpose of the Plan is to permit employees of Agritope, Inc., a
Delaware corporation ("Corporation"), and of its Subsidiaries (as hereinafter
defined) to obtain or increase a proprietary interest in Corporation by
permitting them to make installment purchases of shares of Corporation's Common
Stock (as hereinafter defined) through payroll deductions. The Plan is intended
to qualify as an "employee stock purchase plan" within the meaning of Section
423 of the Internal Revenue Code of 1986, as amended (the "Code").
2. Definitions.
-----------
Board of Directors. The Board of Directors of Corporation or
------------------
a committee thereof duly authorized for the purposes of administering
this Plan.
Common Stock. Corporation's common stock, par value $.01 per
------------
share, and any security of Corporation issued in substitution,
exchange, or in lieu of such stock.
Eligible Employees. Those persons who on the applicable
-------------------
Offering Date are employees of Corporation or a Subsidiary except those
who, immediately prior to the applicable Offering Date, would be deemed
under Section 423(b)(3) of the Code to own stock possessing 5 percent
or more of the total combined voting power or value of all classes of
stock of Corporation or any other corporation that constitutes a parent
or subsidiary corporation of Corporation within the meaning of that
section.
Maximum Purchase Price. 85 percent of the mean between the
------------------------
reported high and low sale prices, or, if there is no sale on such day,
the mean between the reported bid and asked prices, of Common Stock on
the securities exchange or automated securities interdealer quotation
system on which Common Stock shall have been traded on the last trading
day preceding the applicable Offering Date.
Monthly Compensation. For an Eligible Employee on the payroll
--------------------
of Corporation or a Subsidiary for the entire calendar month preceding
the applicable Offering Date, the compensation paid or accrued to such
Eligible Employee for such month plus, in the case of such an Eligible
Employee whose compensation for such month was based wholly or partly
on a bonus, commission, profit sharing, or similar arrangement for
which no accrual was made for such month, an amount equal to the
portion attributable to one month of the amount accrued to such
Eligible Employee as of the day preceding the applicable Offering Date,
on the books of Corporation or its Subsidiaries in accordance with such
arrangement. For all other Eligible Employees, Monthly Compensation
shall be the monthly rate of compensation in effect immediately prior
to the applicable Offering Date. For all purposes of the Plan, Monthly
Compensation shall include any amount which is contributed by
Corporation or a Subsidiary pursuant to a salary reduction agreement
and which is not includable in the gross income of an Eligible Employee
under Code Sections 125 (relating to "cafeteria plans") or 402(a)(8)
(relating to elective contributions under a "401(k)" plan).
Offering Dates. Such dates as may be set by the Board of
---------------
Directors, provided that no more than three Offering Dates (other than
Special Offering Dates for purposes of Special Offerings pursuant to
Section 6 of this Plan) may be set during each fiscal year. The first
day of each calendar month, commencing January 1, 1998, shall be a
II-14
<PAGE>
Special Offering Date. Except as otherwise expressly provided in this
Plan, all references to Offering Dates shall include Special Offering
Dates.
Offering Periods. Such periods as may be set by the Board of
-----------------
Directors for the offering of Common Stock pursuant to this Plan.
Participant. An Eligible Employee who subscribes for the
-----------
purchase of shares of Common Stock under the Plan in accordance with
the Plan (including an Eligible Employee who participates in a Special
Offering pursuant to Section 6 of this Plan).
Purchase Dates. Such dates as may be set by the Board of
---------------
Directors for the purchase of Common Stock, provided that (i) Purchase
Dates shall be no less than six months and no more than 24 months after
the termination of the applicable Offering Period and (ii) Purchase
Dates may be any earlier date of purchase pursuant to the terms of this
Plan, including Sections 11 (termination of employment), 12 (retirement
or disability), and 13 (death).
Purchase Periods. The period beginning on the termination of
----------------
an Offering Period and ending on the applicable Purchase Date.
Purchase Price. The lesser of (i) the Maximum Purchase Price
--------------
or (ii) 85 percent of the mean between the reported high and low sale
prices, or, if there is no sale on such day, the mean between the
reported bid and asked prices, of Common Stock on the securities
exchange or automated securities interdealer quotation system on which
Common Stock shall have been traded on the applicable Purchase Date or,
if the Purchase Date is not a trading day, on the last trading day
preceding such date. The Purchase Price per share shall be subject to
adjustment in accordance with the provisions of Section 17 of this
Plan.
Special Offering. An offering pursuant to Section 6 of this
-----------------
Plan.
Subsidiary. A domestic corporation of which, on the applicable
----------
Offering Date, Corporation or a Subsidiary of Corporation owns at least
50 percent of the total combined voting power of all classes of stock
and whose employees are authorized to participate in the Plan by the
Board of Directors of Corporation.
3. The Offering. The number of shares of Common Stock subject
------------
to the Plan shall be 250,000 shares, subject to adjustment as provided in
Section 17 of this Plan. During each Offering Period, Corporation may offer, at
the applicable Purchase Price, for subscription by Eligible Employees in
accordance with the terms of the Plan, such number of authorized and unissued
shares of its Common Stock subject to the Plan as may be determined by the Board
of Directors.
4. Subscriptions.
-------------
a. Shares Subject to Subscription. Except as provided in
--------------------------------
Section 6 of this Plan with respect to Special Offerings, during each Offering
Period, each Eligible Employee shall be entitled to subscribe for the number of
whole shares of Common Stock offered during such Offering Period designated by
him or her in accordance with the terms of the Plan; provided, however, that for
any Offering Period, the Board of Directors may set a minimum, a maximum, or
both a minimum and a maximum number of shares that may be subscribed for during
such Offering Period. In no event may any employee subscribe for shares (under
any one or more Offering Periods which have Offering Dates within any calendar
year) which would have a total value (computed as the number of shares
subscribed for during each such Offering Period multiplied by the Maximum
Purchase Price for each such Offering Period) in excess of $21,250.
II-15
<PAGE>
b. Further Limitation on Subscriptions. Notwithstanding
---------------------------------------
Section 4.a of this Plan, the maximum number of shares that may be subscribed
for by an Eligible Employee shall be further limited and reduced to the extent
that the number of shares owned by such Eligible Employee immediately after any
Offering Date for purposes of Section 423(b)(3) of the Code plus the maximum
number of shares set forth in Section 4.a of this Plan would exceed 5 percent of
the total combined voting power or value of all classes of stock of Corporation
or a parent or subsidiary corporation of Corporation within the meaning set
forth in Section 423(b)(3) of the Code.
c. Subscription Agreements. Subscriptions pursuant to the Plan
-----------------------
shall be evidenced by the completion and execution of subscription agreements in
the form provided by Corporation and delivery of such agreements to Corporation,
at the place designated by Corporation, prior to the expiration of each Offering
Period. No subscription agreement shall be subject to termination or reduction
during the Offering Period to which it relates without written consent of
Corporation.
d. Over Subscription. In the event that the aggregate number
------------------
of shares of Common Stock subscribed for pursuant to the Plan as of any Purchase
Date shall exceed the number of shares of Common Stock offered for sale during
the Offering Period related to such Purchase Date, then each subscription for
such Offering Period pursuant to which a purchase is effected shall be reduced
to the number of shares of Common Stock that such subscription would cover in
the event of a proportionate reduction of all subscriptions for such Offering
Period outstanding on such Purchase Date so that the aggregate number of shares
subject to all such subscriptions would not exceed the number of shares offered
for sale during such Offering Period. In making such reductions, fractions of
shares shall be disregarded and each subscription shall be for a whole number of
shares.
5. Payment of Purchase Price. Except as otherwise specifically
-------------------------
provided in the Plan, the Purchase Price of all shares purchased hereunder shall
be paid in equal installments through payroll deduction from the Participant's
compensation during the applicable Purchase Period, without the right of
prepayment. The Maximum Purchase Price multiplied by the number of shares
subscribed for shall be withheld in substantially equal installments on each pay
period during the applicable Purchase Period.
6. Special Offers.
--------------
a. Definitions. For purposes of this Section 6, the following
-----------
terms shall have the following meanings:
Annual Increase. The gross annual amount (before any
-----------------
applicable withholding) by which an employee's compensation would
otherwise be increased during the one-year period following an Annual
Review Date for such employee had the employee not been subject to a
Special Offering Subscription pursuant to this Section 6.
Annual Review Date. The effective date, which may be an
--------------------
employee's anniversary date, of an increase in compensation on account
of the employee's annual compensation review by Corporation.
Special Offering Date. The first day of each calendar month
-----------------------
commencing January 1, 1998.
Special Offering Subscription. A subscription pursuant to this
-----------------------------
Section 6 for the number of whole shares of Common Stock equal to an
Eligible Employee's Annual Increase as of an Annual Review Date divided
by the Maximum Purchase Price for the Special Offering Date which falls
on or immediately follows the Annual Review Date.
Special Purchase Date. For each Participant with a Special
----------------------
Offering Subscription, the one-year anniversary of the Annual Review
Date corresponding to the subscription.
II-16
<PAGE>
Special Purchase Period. The period from a Participant's
-------------------------
Annual Review date preceding a Special Offering Date through the
corresponding Special Purchase Date.
b. Subscription. As of each Annual Review Date for each
------------
Eligible Employee:
i. Corporation may, in its discretion, provide the Eligible
Employee a Special Offering Subscription in lieu of any increase in
cash compensation during the following year; or
ii. The Eligible Employee may make an irrevocable election to
receive a Special Offering Subscription in lieu of any increase in cash
compensation during the following year.
c. Subscription Agreement. Each Special Offering Subscription
----------------------
shall be evidenced by the completion of a Special Offering Subscription
Agreement in the form provided by Corporation.
d. Payment of Purchase Price. For each Special Offering
----------------------------
Subscription, Corporation shall credit to an account for the Participant an
amount equal to the Annual Increase in equal installments as of each payment
date for the Participant during the Special Purchase Period.
e. Right to Terminate Election or Reduce Number of Shares.
----------------------------------------------------------
Notwithstanding Sections 9 and 10 of this Plan, a Participant subject to a
Special Offering Subscription may terminate the Special Offering Subscription or
reduce the number of shares covered by the Special Offering Subscription only as
of the Special Purchase Date (or an earlier Purchase Date upon the occurrence of
one or more of the events described in Sections 11, 12, or 13). Such a
termination or reduction must be made by written notice to Corporation and must
be received by Corporation no later than the last business day before the
Special Purchase Date (or such earlier Purchase Date).
f. Withholding. Participants shall be subject to applicable
-----------
state and federal tax withholding and employment taxes on the shares purchased
pursuant to a Special Offering Subscription or upon payment of the amounts
credited to the Participant's account. Corporation's obligation to issue shares
shall be conditioned on the payment by the Participant (or other arrangement
satisfactory to Corporation) of all applicable withholding taxes.
7. Application of Funds; Participants' Accounts. All amounts
----------------------------------------------
withheld from and paid by Participants hereunder shall be deposited in
Corporation's general corporate account to be used for any corporate purposes;
provided, however, that Corporation shall maintain a separate bookkeeping
account for each Participant hereunder reflecting all amounts withheld from and
paid by such Participant with respect to each Purchase Period under the Plan. No
interest shall be credited to such separate accounts.
8. Issuance of Shares. Shares purchased under the Plan shall,
------------------
for all purposes, be considered to have been issued, sold, and purchased at the
close of business on the applicable Purchase Date. Prior to each applicable
Purchase Date, no Participant shall have any rights as a holder of any shares
covered by a subscription agreement. Promptly after each Purchase Date,
Corporation shall issue and deliver to the Participant a stock certificate or
certificates representing the whole number of shares purchased by the
Participant during the Purchase Period ending with such Purchase Date and refund
to the Participant in cash any excess amount in his or her account relating to
such Purchase Period. No adjustment shall be made for dividends or for the other
rights for which the record date is prior to the applicable Purchase Date,
except as may otherwise be provided in Section 17.
9. Right to Terminate Subscription. Except as provided in
---------------------------------
Section 6 of this Plan, each Participant shall have the right, at any time after
the expiration of each Offering Period and prior to the applicable Purchase
Date, to terminate his or her subscription relating to such Offering Period by
written notice to Corporation and receive a prompt refund in cash of the total
amount in his or her account with respect to the applicable Purchase Period.
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<PAGE>
10. Right to Reduce Number of Shares. Except as provided in
---------------------------------
Section 6 of this Plan, each Participant shall have the right, at any time after
the expiration of each Offering Period and prior to the applicable Purchase
Date, to make, by written notice to Corporation, a one-time-only reduction in
the number of shares covered by his or her subscription agreement relating to
such Offering Period, provided that such right shall only apply to Purchase
Periods of 12 months or more. Upon such reduction of shares, an appropriate
reduction shall be made in the Participant's future payroll deductions during
the applicable Purchase Period and the excess amount in the Participant's
account with respect to such Purchase Period resulting from such reduction shall
be promptly refunded to the Participant in cash or, at the option of the
Participant, shall be applied in equal amounts against all future installment
payments of the Maximum Purchase Price of the reduced number of shares to be
purchased during the applicable Purchase Period.
11. Termination of Employment. Upon termination of employment
-------------------------
of a Participant for any reason other than retirement, disability or death,
including by reason of the sale of the Subsidiary by which the Participant is
employed such that Corporation or a Subsidiary of Corporation no longer owns at
least 50 percent of the total combined voting power of all classes of stock of
the Subsidiary, a Participant shall have, during the period of three months
following his or her termination date, but prior to the applicable Purchase
Date, the right with respect to each Purchase Period for which he or she has an
account under the Plan to elect to receive either a refund in cash of the total
amount of his or her account relating to such Purchase Period or the whole
number of shares that can be purchased at the applicable Purchase Price with
such amount together with any remaining cash in his or her account relating to
such Purchase Period. Each election must be in writing and delivered to
Corporation within the aforementioned period. If the Participant elects to
receive shares, the Purchase Date shall be the date the Participant's election
is delivered to Corporation. In the event the Participant does not make a timely
election with respect to any Purchase Period for which he or she has an account
under the Plan, he or she shall be deemed to have elected to receive a cash
refund of the amount of his or her account relating to such Purchase Period.
12. Retirement; Disability. A participant who retires or whose
----------------------
employment is terminated by reason of any injury or illness of such a serious
nature as to disable the Participant from resuming employment with Corporation
shall have all of the rights described in Section 11 above and shall have the
additional right to elect, in the manner described in Section 11, to prepay in
cash in a lump sum the entire unpaid balance of the Purchase Price of the shares
covered by his or her subscription agreement relating to each Purchase Period
and to receive such shares. The Purchase Date for this purpose shall be the date
on which both the Participant's election and the lump-sum cash payment shall
have been delivered to Corporation. For purposes of the Plan, a termination of
employment at or after age 50 for any reason shall be considered retirement.
13. Death. In the event of the death of a Participant while in
-----
the employ of Corporation or a Subsidiary and prior to full payment of the
Maximum Purchase Price for the shares covered by his or her subscription with
respect to each Purchase Period, or the death of a retired or disabled
Participant prior to the exercise of his or her rights described in Section 12
above, his or her personal representative shall have, during the period of three
months following the Participant's death, but prior to the applicable Purchase
Date, the rights described in Section 12. In the event of the death of a
Participant who previously terminated employment by reason other than retirement
or disability prior to full payment of the Maximum Purchase Price for the shares
covered by his or her subscription with respect to each Purchase Period and
prior to the exercise of his or her rights described in Section 11, his or her
personal representative shall have the rights described in Section 11.
14. Temporary Layoff; Leaves of Absence. A Participant's
--------------------------------------
installment payments with respect to each Purchase Period shall be suspended
during any period of absence from work due to temporary layoff or leave of
absence without pay. If such Participant returns to active employment within the
applicable Purchase Period, installment payments shall resume and, except as
provided below with respect to Special Offering Subscriptions, the Participant
shall be entitled to elect either to make up the deficiency in his or her
account with respect to such Purchase Period immediately with a lump-sum cash
payment, or to have future installments with respect to such Purchase Period
uniformly increased to make up the deficiency, or to have an appropriate
reduction made in the number of shares covered by his or her subscription
agreement with respect to such Purchase Period to eliminate the deficiency. The
election (together with the lump-sum cash payment, if applicable) must be
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<PAGE>
delivered to Corporation within ten days of the Participant's return to active
employment but prior to the applicable Purchase Date. If the Participant fails
to make a timely election, the appropriate reduction of shares shall be made in
accordance with the above. If the Participant does not return to active
employment within the applicable Purchase Period, he or she shall have the right
to elect to receive either a refund in cash of the total amount of his or her
account with respect to such Purchase Period or the whole number of shares which
can be purchased at the applicable Purchase Price with such amount together with
any remaining cash in his or her account with respect to the Purchase Period.
The election must be in writing and delivered to Corporation prior to, and shall
be effective as of, the applicable Purchase Date. In the event the Participant
does not make a timely election with respect to any Purchase Period, he or she
shall be deemed to have elected to receive the cash refund with respect to that
Purchase Period. For Special Offering Subscriptions under Section 6 of the Plan,
no amounts with respect to Annual Increase will be credited during a period of
absence from work due to temporary layoff or leave of absence without pay and
such amounts will not be made up after return to active employment.
15. Insufficiency of Compensation. In the event that for any
-----------------------------
payroll period, for reasons other than termination of employment for any reason,
temporary layoff, or leave of absence without pay, a Participant's compensation
(after all other proper deductions from his or her compensation) becomes
insufficient to permit the full withholding of his or her installment payment,
the Participant may pay the deficiency in cash when it becomes due. In the event
that, in a subsequent payroll period, the Participant's compensation becomes
sufficient to make the full installment payment and there still remains a
deficiency in his or her account, the deficiency must then be eliminated through
the election of one of the alternatives described in Section 14. The Participant
must deliver his or her election to Corporation within ten days of the end of
such subsequent payroll period but prior to the applicable Purchase Date. In the
event that on the applicable Purchase Date there remains a deficiency in such a
Participant's account or, in the event a Participant described above fails to
make a timely election, the appropriate reduction of shares shall be made in
accordance with Section 14.
16. Interest. Any person who becomes entitled to receive any
--------
amount of cash refund from any account maintained for him or her pursuant to any
provision of the Plan shall be entitled to receive in cash, at the same time,
simple interest on the amount of such refund at the rate of 6 percent per annum.
Any refund shall be deemed to be made from the most recent payment or payments
made by the Participant pursuant to the Plan.
17. Effect of Certain Stock Transactions. If at any time after
------------------------------------
the day preceding the Offering Date for each Purchase Period, and prior to the
issue and sale by Corporation of all the shares of Common Stock covered by
Participants' subscription agreements with respect to each Purchase Period for
which the Offering Date has occurred, Corporation shall effect a subdivision of
shares of Common Stock or other increase (by stock dividend or otherwise) of the
number of shares of Common Stock outstanding, without the receipt of
consideration by Corporation or another corporation in which it is financially
interested and otherwise than in discharge of Corporation's obligation to make
further payment for assets theretofore acquired by it or such other corporation
or upon conversion of stock or other securities issued for consideration, or
shall reduce the number of shares of Common Stock outstanding by a consolidation
of shares, then (a) in the event of such an increase in the number of such
shares outstanding, the number of shares of Common Stock then subject to
Participants' subscription agreements with respect to such Purchase Period shall
be proportionately increased and the Maximum Purchase Price and the Purchase
Price per share for such Purchase Period shall be proportionately reduced, and
(b) in the event of such a reduction in the number of such shares outstanding,
the number of shares of Common Stock then subject to subscription agreements
with respect to such Purchase Period shall be proportionately reduced and the
Maximum Purchase Price and the Purchase Price per share for such Purchase Period
shall be proportionately increased. Except as provided in this Section 17, no
adjustment shall be made under this Plan or any subscription agreement by reason
of any dividend or other distribution declared or paid by Corporation.
18. Merger, Consolidation, Liquidation or Dissolution. In the
--------------------------------------------------
event of any merger or consolidation of which Corporation is not to be the
survivor (or in which Corporation is the survivor, but becomes a subsidiary of
another corporation), or the liquidation or dissolution of Corporation, each
Participant shall have the right immediately prior to such event to elect to
receive the number of whole shares that can be purchased at the Purchase Price
applicable to each Purchase Period with respect to which such Participant has
subscribed for purchase of Common Stock with the full amount that has been
withheld from and paid by him or her pursuant to the subscription agreement
II-19
<PAGE>
relating to such Purchase Period, together with any remaining excess cash in his
or her account relating to such Purchase Period. If such election is not made
with respect to the amount in a Participant's account for any Purchase Period,
the Participant's subscription agreement shall terminate and he or she shall
receive a prompt refund in cash of the total amount in such account.
19. Limitation on Right to Purchase. Notwithstanding any
----------------------------------
provision of the Plan to the contrary, if at any time a Participant is entitled
to purchase shares of Common Stock on a Purchase Date, taking into account such
Participant's rights, if any, to purchase Common Stock under the Plan and all
other stock purchase plans of Corporation and of other corporations that
constitute parent or subsidiary corporations of Corporation within the meaning
of Sections 424(e) and (f) of the Code, the result would be that, during the
then current calendar year, such Participant would have first become entitled to
purchase under the Plan and all such other plans a number of shares of Common
Stock of Corporation that would exceed the maximum number of shares permitted by
the provisions of Section 423(b)(8) of the Code, then the number of shares that
such Participant shall be entitled to purchase pursuant to the Plan on such
Purchase Date shall be reduced by the number that is one more than the number of
shares that represents the excess, and any excess amount in his or her account
resulting from such reduction shall be promptly refunded to him or her in cash.
20. Non-Assignability. None of the rights of an Eligible
-----------------
Employee under the Plan or any subscription agreement entered into pursuant
hereto shall be transferable by such Eligible Employee otherwise than by will or
the laws of descent and distribution, and during the lifetime of an Eligible
Employee such rights shall be exercisable only by him or her.
21. Shares Not Purchased. Shares of Common Stock subject to
---------------------
the Plan that are not subscribed for during each successive Offering Period and
shares subscribed for pursuant to such Offering Period that thereafter cease to
be subject to any subscription agreement hereunder shall remain subject to and
reserved for use in connection with a later Offering Period established by the
Board of Directors.
22. Construction; Administration. All questions with respect
-----------------------------
to the construction and application of the Plan and subscription agreements
thereunder and the administration of the Plan shall be settled by the
determination of the Board of Directors or of one or more other persons
designated by it, which determinations shall be final, binding and conclusive on
Corporation and all employees and other persons. All Eligible Employees shall
have the same rights and privileges under the Plan.
23. Termination or Amendment. Without further approval of
-------------------------
Corporation's stockholders, the Board of Directors may at any time terminate the
Plan or may amend the Plan from time to time in such respects as the Board of
Directors may deem advisable, except that the Board of Directors may not,
without the approval of Corporation's stockholders, make any amendment that
would materially increase the aggregate number of Shares that may be issued
under the Plan or decrease the price per Share (except for adjustments pursuant
to Section 17 of the Plan).
24. Governing Law. Except with respect to references to the
-------------
Code or federal securities laws, the Plan and all actions taken under the Plan
shall be governed by and construed in accordance with the laws of the state of
Oregon.
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